Marketers Aim New Ads

ince Apple Computer Inc.'s video iPod made its debut less than four months ago, users have been able to download their favorite TV shows free from ads. Now, advertisers are scrambling for a way to subvert the sleek device for their own purposes.

Some companies are attaching recycled TV spots to the beginning of video files, or podcasts, that can be downloaded from popular Web sites. Others are creating new, subtler pitches to bracket shows attractive to their target audiences. And still others are creating their own podcasts that blur the line between entertainment and advertisement in hopes of enticing people to watch the commercials for their own sake.

"It's a lot of trial and error," says Liz Vanzura, global marketing director for General Motors Corp.'s Cadillac division.
[Firms like Nintendo are scrambling to develop advertising to-go to market products to iPod viewers.]
Firms like Nintendo are scrambling to develop advertising to-go to market products to iPod viewers.



Video iPods and other hand-held devices such as cell phones have made entertainment portable, with people able to watch episodes of selected programs and other pieces of content at their convenience. The problem is that Apple offers its paid content ad-free on iTunes, including hit TV shows such as "Lost" and "Desperate Housewives," forcing marketers to find new ways to deliver their messages to viewers of other video content available online. Call it advertising on the go.

"It's a real challenge," says Marlene Coulis, vice president for brand management at Anheuser-Busch. On TV and other traditional types of media, ads are jammed into the middle of shows. When it comes to iPod ads, advertisers are being careful not to become so intrusive as to turn off would-be viewers.

Although marketers are eager to experiment, many are struggling to figure out what ad content is appropriate for the iPod. Some companies, such as Nintendo Co., have taken tentative steps. The videogame maker has reused 15-second TV commercials for its "Mario Kart DS" at the beginning of video podcasts on GrindTV.com, a unit of Los Angeles-based PureVideo Inc. The spots appear at the beginning of two-minute short surfing films such as "Triple Crown Big Pipeline" and "Girls of the North Shore."

Tracey Scheppach -- video innovation director at Publicis Groupe SA's Starcom, the media-buying unit responsible for Nintendo's iPod push -- says that over time advertisers will have to move beyond simply repurposing TV campaigns. "Advertisers have to free themselves from the 30-second ad," adds Ms. Scheppach.

GM's Hummer division has appended 15-second ads for the beefy SUV, to the beginning and end of a video podcast that shows what went on backstage at GQ magazine's star-studded party hyping its "Men of the Year" issue. The car maker crafted special 15-second clips, and tried to give them a different feel than television commercials. Opening with the Hummer H3 logo, the clips simply show a vehicle driving on an urban highway and through the mountains. The screen reads: "Hummer like nothing else." There is no mention of sticker price. "It's not about hard-sell on the iPod," says Vanzura, who helped develop the campaign when she was marketing director for Hummer.

FoneGear announces iPod and audio accessories

* buts tuneGear, podBLING FoneGear today announced tuneGEAR--its line of iPod and audio accessories--and introduced its "podBLING" accessories.
* TuneGEAR products will initially include headphones, charging solutions, carrying solutions, FM-radio transmitters, and "Music Experience Enhancements."
* All tuneGEAR headsets include basic ear buds, "audio-foam" cushioned headsets with volume control, ear-clip sport ear buds with volume control, and ear buds with volume control in a lightweight aluminum housing, offering high fidelity stereo sound.
* FoneGear's "podBLING" is a diverse array of sparkly accessories to "dress up" Apple's iPod, as well as other MP3 players.
* PodBLING consists of full rhinestone covers in a variety of colors and patterns for the video iPod, iPod mini, iPod shuffle, and iPod nano.
* The company is expected to offer charging solutions for many of Apple's music players, including the iPod Mini, and the iPod nano.
* FoneGear Products include 12-volt vehicle chargers, retractable USB sync/charging cables, and home-and-away travel chargers.
* TuneGEAR cases are expected to be available in premium leather in both clear-front pouch and protective cover flap versions for the Apple iPod music players, the iPod mini, and the iPod nano.
* The company says it will roll out durable tuneGEAR leather holsters for the Apple iPod, the iPod mini, and the iPod nano, as well as a universal armband kit to provide four holders in one package for carrying any iPod music player on an included elastic armband.
* FoneGear plans to initially release three tuneGEAR FM-radio transmitters, which includes the "3-in-1" 12-volt transmitter--a vehicle cradle for the video iPod, iPod Mini, and iPod nano--allowing users to play their iPod over a vehicle's FM radio, charge their iPod, and safely cradle it at a viewable angle.
* The tuneGEAR battery-powered FM-radio transmitter is a universal device for any music player with a 3.5mm audio jack that uses two AAA-sized batteries to transmit to any home or vehicle FM radio.

CES 2006 Coverage: More iPod Accessories Debut

As if we haven't seen enough iPod accessories already, CES presented a host of new companies (and old ones) with new and updated product lines exclusively for the iPod.

We asked companies if they were gambling the market by offering extensive iPod exclusive products and what would happen should the iPod's value decline. Though Apple is the largest MP3 player seller with record sales quarter after quarter, its marketshare has trickled down over time. Due to this, Apple's competitors, including Creative, Sony and a number of others, felt relived this year, since they now had a chance to capture the market that Apple had lost.

Creative was perhaps one of the only companies that's concentrating on making "actual" products and matching accessories at the same time. Majority of the other companies are focusing on the iPod exclusively. We asked Altec Lansing and Kensington the kind of sales figures they were noticing with their iPod accessories, and if iPod users were really spending more on the accessories than they did on the device itself. We got surprising answers. While neither company gave us specific sales figures, they did say that iPod users are in fact spending thousands more on additional accessories to enhance their experience with the iPod.

Despite stiff competition, the demand is there for multiple companies to co-exist with iPod exclusive products.

Baby, you can drive my iPod

SAN FRANCISCO (Business 2.0) - What were the most expensive iPod accessories on display at this week's Macworld Expo?

They had to be the half-dozen cars parked in a corner of the cavernous Moscone Center, each plugged into one of Apple's tiny music players.

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Mercedes-Benz was one of the first automakers to offer iPod integration.



Less than two years after introducing its first partnership with an automaker (see "Apple at the Wheel" timeline at right), Apple (Research) has made iPod integration the hottest new car option for 2006.

With Sunday's announcement that Chrysler (Research), Dodge, and Jeep vehicles will feature iPod connectors, 16 auto brands now offer accessories that let you plug your iPod into your car's audio system.

Apple estimates that 40 percent of cars sold in the U.S. this year will offer iPod integration.

Some iPod-ready autos put iPod-like playback controls right on the steering wheel or instrument panel, with the built-in stereo displaying the name of the current track.

Acura plans to let drivers command an iPod through a voice-recognition system. Simpler accessories offered by automakers broadcast the iPod's audio signal to a car's FM radio.

The "iPod tax"
For automakers, this seamless integration comes at a cost. Apple exerts tight control over accessories for its music player through its "Made for iPod" licensing program. Dashboard integration with the iPod requires the ability to plug into the iPod's special dock connector -- and that, in turn, requires a license from Apple.

"Made for iPod" may be quite lucrative for Apple, with accessory makers reportedly paying 10 percent of the wholesale price of their wares for a license. Some observers have dubbed the license charge an "iPod tax." Apple has said that the license helps reassure accessory makers that the technical specs of the iPod dock won't change, rendering their products obsolete. In any event, Steve Jobs & co. could end up with a considerable revenue stream: Phil Magney, principal analyst at Telematics Research Group, estimates that 400,000 iPod-specific car audio accessories were sold in 2005 -- worth between $750 million and $1.5 billion at wholesale -- and he expects the market to grow to 6.8 million units by 2010.

How does Steve Jobs manage to have such influence over the proud auto chieftains of Detroit, Stuttgart, and Tokyo?

First of all, there's the runaway success of the iPod, with 42 million sold to date and 14 million sold in just the past three months. Sheer numbers have made the iPod a must-have auto accessory, and the iPod tax a small price to pay.

Telematics Research Group forecasts that by 2011, 28 million autos in the U.S. and 73 million autos worldwide will have iPod integration, up from just under a million last year.

Third-party options
"iPod integration is still a cool feature," says Brian Moody, Road Test editor at Edmunds.com. "It's not yet expected." In three to five years, he says, it might become standard.

In the meantime, he expects most automakers will introduce audio-input jacks that let drivers plug any sort of MP3 player into the car stereo. (Audio inputs, while compatible with any player, don't let drivers use steering-wheel controls to control music playback or volume, or see the current track on the stereo display.)

For those looking to hook up an older car or a 2006 model that doesn't yet have an iPod kit, there are a host of third-party options.

The simplest include FM broadcasters and cassette adapters, which feed the iPod's audio output to the car stereo. The most advanced include displays for playing downloaded iPod videos, with inputs for multiple high-tech devices -- satellite and HD radio and DVD players as well as for the iPod. Alpine, Clarion, and Pioneer are some of the biggest firms in the iPod-auto accessory business.

Apple Announces the iPod Radio Remote

MACWORLD EXPO, SAN FRANCISCO—January 10, 2006—Apple® today announced the iPod® Radio Remote which combines the convenience of a wired remote control with new FM radio capabilities for the iPod nano and fifth generation iPod. The iPod Radio Remote is a convenient way for music lovers to skip tracks and adjust the volume of their iPod even when it’s in a pocket or backpack, and listen to FM radio stations while displaying station and song information on their iPod screen.

“The iPod Radio Remote combines two great features in one elegant product,” said Greg Joswiak, Apple’s vice president of Worldwide iPod Product Marketing. “The iPod Radio Remote is both the best remote control and the best FM radio listening experience for iPod.”

In addition to the iPod Radio Remote and the over 2,000 accessories designed for iPod are the iPod AV Connection Kit and the new iPod nano In-Ear Lanyard Headphones. The iPod AV Connection Kit includes everything needed to connect the iPod to a TV for watching photo slideshows and video, or a stereo system for listening to music, and charges the iPod. The new iPod nano In-Ear Lanyard Headphones combine the best of the iPod nano Lanyard Headphones and the Apple In-Ear Headphones, providing convenience and style with comfort and sound quality.

Pricing & Availability
The iPod Radio Remote includes a pair of Apple headphones with a shorter cable, perfectly complementing the iPod Radio Remote and will begin shipping immediately for $49 (US). The iPod displays station and song information for stations that support the Radio Data System (RDS). The iPod AV Connection Kit includes an iPod Universal Dock, an Apple Remote, an iPod AV Cable, an iPod Dock Connector to USB 2.0 Cable and an iPod USB Power Adapter and is compatible with all iPod models with a dock connector for $99 (US). The iPod nano In-Ear Lanyard Headphones will be available for $49 (US) and include three different sized caps to ensure the headphones fit comfortably and securely. The above accessories will begin shipping immediately and will be available through the Apple Store® (www.apple.com), Apple’s retail stores and Apple Authorized Resellers.

Apple ignited the personal computer revolution in the 1970s with the Apple II and reinvented the personal computer in the 1980s with the Macintosh. Today, Apple continues to lead the industry in innovation with its award-winning desktop and notebook computers, OS X operating system, and iLife and professional applications. Apple is also spearheading the digital music revolution with its iPod portable music players and iTunes online music store.

iPod add-ons take center stage at CES showcase

If the 40-minute wait for a cab at McCarran International Airport doesn’t provide a broad enough hint, a gander at the number of people wandering the Las Vegas Strip with badges dangling round their necks should—Las Vegas’ Consumer Electronics Show is massive.

Because of that unwieldy size, organizers set up showcase events to give the media a closer look at some of the more interesting products offered by major vendors. The first such event was Wednesday night’s Digital Experience.

More than 100 vendors packed themselves into the Bellagio’s Grand Ballroom to hawk their latest and greatest consumer wares. Included in that number were such recognizable companies as Epson, HP, Panasonic, Toshiba, Samsung, SanDisk, and Sony along with names familiar to many iPod users—Altec-Lansing, Belkin, DLO, M-Audio, and Sonos. Our tour around the floor revealed more than the martini bar and chocolate fountains. Playlist Mag